EX-99 2 alit-ex99_1.htm EX-99.1 EX-99

Exhibit 99.1

 

Alight, Inc.

Recast of Segment Information

 For the quarters of fiscal 2022 and for the years ended

December 31, 2022 and 2021


 


 

 

Financial Statement Presentation

As a result of the Business Combination, this exhibit includes certain historical consolidated financial and other data for Alight Holding Company, LLC (formerly known as Tempo Holding Company, LLC) (“Alight Holdings”) and its subsidiaries. Specifically the tables in this exhibit include selected financial data for the Company Successor six months ended December 31, 2021, and Alight Holdings as the Predecessor for the six months ended June 30, 2021.

Non-GAAP Financial Measures

Pursuant to the requirements of Regulation G, the Company has provided a reconciliation of each non-GAAP financial measure used in this exhibit to the most directly comparable GAAP financial measure in the tables below. The presentation of non-GAAP financial measures is used to enhance our investors’ and lenders’ understanding of certain aspects of our financial performance. This discussion is not meant to be considered in isolation, superior to, or as a substitute for the directly comparable financial measures prepared in accordance with GAAP.

Adjusted Gross Profit and Adjusted Gross Margin Percent. Adjusted gross profit is defined as revenue less cost of services adjusted for depreciation, amortization and share-based compensation. Adjusted gross margin percent is defined as adjusted gross profit divided by revenue. Management uses gross profit and gross margin percent as key measures in making financial, operating and planning decisions and in evaluating our performance. We believe that presenting adjusted gross profit and adjusted gross margin percent is useful to investors as it eliminates the impact of certain non-cash expenses and allows a direct comparison between periods.
 

 

 

1

 

Alight, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Recast of Segment Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As Previously Reported

 

($ in millions)

 

Q1'22

 

 

Q2'22

 

 

Q3'22

 

 

Q4'22

 

 

FY'22

 

Segment Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employer Solutions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Recurring

 

$

570

 

 

$

559

 

 

$

583

 

 

$

755

 

 

$

2,467

 

Project

 

 

53

 

 

 

55

 

 

 

62

 

 

 

81

 

 

 

251

 

Total Employer Solutions

 

 

623

 

 

 

614

 

 

 

645

 

 

 

836

 

 

 

2,718

 

Professional Services

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Recurring

 

 

30

 

 

 

32

 

 

 

32

 

 

 

34

 

 

 

128

 

Project

 

 

60

 

 

 

59

 

 

 

63

 

 

 

61

 

 

 

243

 

Total Professional Services

 

 

90

 

 

 

91

 

 

 

95

 

 

 

95

 

 

 

371

 

Hosted Business

 

 

12

 

 

 

10

 

 

 

10

 

 

 

11

 

 

 

43

 

Total

 

$

725

 

 

$

715

 

 

$

750

 

 

 

942

 

 

$

3,132

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As Reported Herein

 

($ in millions)

 

Q1'22

 

 

Q2'22

 

 

Q3'22

 

 

Q4'22

 

 

FY'22

 

Segment Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employer Solutions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Recurring

 

$

570

 

 

$

559

 

 

$

583

 

 

$

755

 

 

$

2,467

 

Project

 

 

53

 

 

 

55

 

 

 

62

 

 

 

81

 

 

 

251

 

Total Employer Solutions

 

 

623

 

 

 

614

 

 

 

645

 

 

 

836

 

 

 

2,718

 

Professional Services:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Recurring

 

 

30

 

 

 

32

 

 

 

32

 

 

 

34

 

 

 

128

 

Project

 

 

60

 

 

 

59

 

 

 

63

 

 

 

61

 

 

 

243

 

Total Professional Services

 

 

90

 

 

 

91

 

 

 

95

 

 

 

95

 

 

 

371

 

Total Reportable Segments

 

 

713

 

 

 

705

 

 

 

740

 

 

 

931

 

 

 

3,089

 

Other

 

 

12

 

 

 

10

 

 

 

10

 

 

 

11

 

 

 

43

 

Total

 

$

725

 

 

$

715

 

 

$

750

 

 

$

942

 

 

$

3,132

 

 

2

 

 

As Previously Reported

 

 

 

Successor

 

 

 

Predecessor

 

 

 

Six Months Ended

 

 

 

Six Months Ended

 

($ in millions)

 

December 31, 2021

 

 

 

June 30, 2021

 

Segment Revenues

 

 

 

 

 

 

 

Employer Solutions

 

 

 

 

 

 

 

Recurring

 

$

1,213

 

 

 

$

1,049

 

Project

 

 

134

 

 

 

 

107

 

Total Employer Solutions

 

 

1,347

 

 

 

 

1,156

 

Professional Services

 

 

 

 

 

 

 

Recurring

 

 

65

 

 

 

 

60

 

Project

 

 

121

 

 

 

 

124

 

Total Professional Services

 

 

186

 

 

 

 

184

 

Hosted Business

 

 

21

 

 

 

 

21

 

Total

 

$

1,554

 

 

 

$

1,361

 

 

 

 

 

 

 

 

 

 

 

As Reported Herein

 

 

 

Successor

 

 

 

Predecessor

 

 

 

Six Months Ended

 

 

 

Six Months Ended

 

($ in millions)

 

December 31, 2021

 

 

 

June 30, 2021

 

Segment Revenues

 

 

 

 

 

 

 

Employer Solutions:

 

 

 

 

 

 

 

Recurring

 

$

1,213

 

 

 

$

1,049

 

Project

 

 

134

 

 

 

 

107

 

Total Employer Solutions

 

 

1,347

 

 

 

 

1,156

 

Professional Services:

 

 

 

 

 

 

 

Recurring

 

 

65

 

 

 

 

60

 

Project

 

 

121

 

 

 

 

124

 

Total Professional Services

 

 

186

 

 

 

 

184

 

Total Reportable Segments

 

 

1,533

 

 

 

 

1,340

 

Other

 

 

21

 

 

 

 

21

 

Total

 

$

1,554

 

 

 

$

1,361

 

 

 

3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Recast of Segment Profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As Previously Reported

 

(in millions)

 

Q1'22

 

 

Q2'22

 

 

Q3'22

 

 

Q4'22

 

 

FY'22

 

Employer Solutions

 

$

142

 

 

$

147

 

 

$

130

 

 

$

240

 

 

$

659

 

Professional Services

 

 

-

 

 

 

(3

)

 

 

3

 

 

 

1

 

 

 

1

 

Hosted Business

 

 

-

 

 

 

(2

)

 

 

-

 

 

 

1

 

 

 

(1

)

Total of all reportable segments (1)

 

 

142

 

 

 

142

 

 

 

133

 

 

 

242

 

 

 

659

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-based compensation

 

 

33

 

 

 

42

 

 

 

54

 

 

 

52

 

 

 

181

 

Transaction and integration expenses (2)

 

 

6

 

 

 

3

 

 

 

2

 

 

 

8

 

 

 

19

 

Restructuring

 

 

6

 

 

 

14

 

 

 

23

 

 

 

20

 

 

 

63

 

Other (3)

 

 

3

 

 

 

8

 

 

 

5

 

 

 

(1

)

 

 

15

 

Depreciation

 

 

17

 

 

 

18

 

 

 

21

 

 

 

23

 

 

 

79

 

Intangible amortization

 

 

79

 

 

 

80

 

 

 

78

 

 

 

79

 

 

 

316

 

Operating Income (Loss)

 

 

(2

)

 

 

(23

)

 

 

(50

)

 

 

61

 

 

 

(14

)

(Gain) Loss from change in fair value of financial instruments

 

 

(13

)

 

 

(50

)

 

 

10

 

 

 

15

 

 

 

(38

)

(Gain) Loss from change in fair value of tax receivable agreement

 

 

(5

)

 

 

(38

)

 

 

(20

)

 

 

22

 

 

 

(41

)

Interest expense

 

 

29

 

 

 

29

 

 

 

31

 

 

 

33

 

 

 

122

 

Other (income) expense, net

 

 

(1

)

 

 

(7

)

 

 

(6

)

 

 

(2

)

 

 

(16

)

Income (Loss) Before Income Tax Expense (Benefit)

 

$

(12

)

 

$

43

 

 

$

(65

)

 

$

(7

)

 

$

(41

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As Reported Herein

 

(in millions)

 

Q1'22

 

 

Q2'22

 

 

Q3'22

 

 

Q4'22

 

 

FY'22

 

Employer Solutions

 

$

204

 

 

$

200

 

 

$

189

 

 

$

318

 

 

$

911

 

Professional Services

 

 

19

 

 

 

20

 

 

 

23

 

 

 

24

 

 

 

86

 

Other (4)

 

 

-

 

 

 

(1

)

 

 

-

 

 

 

-

 

 

 

(1

)

Total Gross Profit

 

 

223

 

 

 

219

 

 

 

212

 

 

 

342

 

 

 

996

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

 

140

 

 

 

157

 

 

 

178

 

 

 

196

 

 

 

671

 

Depreciation and intangible amortization

 

 

85

 

 

 

85

 

 

 

84

 

 

 

85

 

 

 

339

 

Operating Income (Loss)

 

 

(2

)

 

 

(23

)

 

 

(50

)

 

 

61

 

 

 

(14

)

(Gain) Loss from change in fair value of financial instruments

 

 

(13

)

 

 

(50

)

 

 

10

 

 

 

15

 

 

 

(38

)

(Gain) Loss from change in fair value of tax receivable agreement

 

 

(5

)

 

 

(38

)

 

 

(20

)

 

 

22

 

 

 

(41

)

Interest expense

 

 

29

 

 

 

29

 

 

 

31

 

 

 

33

 

 

 

122

 

Other (income) expense, net

 

 

(1

)

 

 

(7

)

 

 

(6

)

 

 

(2

)

 

 

(16

)

Income (Loss) Before Income Tax Expense (Benefit)

 

$

(12

)

 

$

43

 

 

$

(65

)

 

$

(7

)

 

$

(41

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Segment Profit was defined as earnings before interest, taxes, depreciation and intangible amortization adjusted for the impact of certain non-cash and other items that the Company does not consider in the evaluation of ongoing operational performance.

 

(2) Transaction and integration expenses related to acquisition activity.

 

(3) For the year ended December 31, 2022, other primarily includes expenses related to debt refinancing completed in the first quarter of 2022 and other non-operational activities, offset by Other (income) expense, net.

 

(4) Includes activity related to the former Hosted segment.

 

 

 

 

4

 

 

 

As Previously Reported

 

 

 

Successor

 

 

 

Predecessor

 

 

 

Six Months Ended

 

 

 

Six Months Ended

 

(in millions)

 

December 31, 2021

 

 

 

June 30, 2021

 

Employer Solutions

 

$

344

 

 

 

$

274

 

Professional Services

 

 

1

 

 

 

 

7

 

Hosted Business

 

 

(2

)

 

 

 

(3

)

Total of all reportable segments (1)

 

 

343

 

 

 

 

278

 

 

 

 

 

 

 

 

 

Share-based compensation

 

 

67

 

 

 

 

5

 

Transaction and integration expenses (2)

 

 

13

 

 

 

 

-

 

Non-recurring professional expenses (3)

 

 

19

 

 

 

 

18

 

Restructuring

 

 

5

 

 

 

 

9

 

Other (4)

 

 

(10

)

 

 

 

(5

)

Depreciation

 

 

31

 

 

 

 

49

 

Intangible amortization

 

 

153

 

 

 

 

100

 

Operating Income (Loss)

 

 

65

 

 

 

 

102

 

(Gain) Loss from change in fair value of financial instruments

 

 

65

 

 

 

 

-

 

(Gain) Loss from change in fair value of tax receivable agreement

 

 

(37

)

 

 

 

-

 

Interest expense

 

 

57

 

 

 

 

123

 

Other (income) expense, net

 

 

3

 

 

 

 

9

 

Income (Loss) Before Income Tax Expense (Benefit)

 

$

(23

)

 

 

$

(30

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As Reported Herein

 

 

 

Successor

 

 

 

Predecessor

 

 

 

Six Months Ended

 

 

 

Six Months Ended

 

(in millions)

 

December 31, 2021

 

 

 

June 30, 2021

 

Employer Solutions

 

$

489

 

 

 

$

392

 

Professional Services

 

 

44

 

 

 

 

46

 

Other (5)

 

 

(1

)

 

 

 

(3

)

Total Gross Profit

 

 

532

 

 

 

 

435

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

 

304

 

 

 

 

222

 

Depreciation and intangible amortization

 

 

163

 

 

 

 

111

 

Operating Income (Loss)

 

 

65

 

 

 

 

102

 

(Gain) Loss from change in fair value of financial instruments

 

 

65

 

 

 

 

-

 

(Gain) Loss from change in fair value of tax receivable agreement

 

 

(37

)

 

 

 

-

 

Interest expense

 

 

57

 

 

 

 

123

 

Other (income) expense, net

 

 

3

 

 

 

 

9

 

Income (Loss) Before Income Tax Expense (Benefit)

 

$

(23

)

 

 

$

(30

)

 

 

 

 

 

 

 

 

(1) Segment Profit was defined as earnings before interest, taxes, depreciation and intangible amortization adjusted for the impact of certain non-cash and other items that the Company does not consider in the evaluation of ongoing operational performance.

 

(2) Transaction and integration expenses related to acquisition activity.

 

(3) Non-recurring professional expenses includes external advisor and legal costs related to the Company’s Business Combination.

 

(4) For the year ended December 31, 2022, other primarily includes expenses related to debt refinancing completed in the first quarter of 2022 and other non-operational activities, offset by Other (income) expense, net.

 

(5) Includes activity related to the former Hosted segment.

 

 

 

5

Gross Profit GAAP to Non-GAAP Reconciliation by Segment

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q1'22

 

($ in millions)

 

Employer Solutions

 

Professional Services

 

Other

 

Total

 

Gross Profit

 

$

204

 

$

19

 

$

-

 

$

223

 

     Add: stock-based compensation

 

 

7

 

 

-

 

 

-

 

 

7

 

     Add: depreciation and amortization

 

 

10

 

 

-

 

 

1

 

 

11

 

Adjusted Gross Profit

 

$

221

 

$

19

 

$

1

 

$

241

 

Gross Margin

 

 

33

%

 

21

%

 

0

%

 

31

%

Adjusted Gross Margin

 

 

35

%

 

21

%

 

8

%

 

33

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q2'22

 

($ in millions)

 

Employer Solutions

 

Professional Services

 

Other

 

Total

 

Gross Profit

 

$

200

 

$

20

 

$

(1

)

$

219

 

     Add: stock-based compensation

 

 

9

 

 

1

 

 

-

 

 

10

 

     Add: depreciation and amortization

 

 

12

 

 

-

 

 

1

 

 

13

 

Adjusted Gross Profit

 

$

221

 

$

21

 

$

-

 

$

242

 

Gross Margin

 

 

33

%

 

22

%

 

-10

%

 

31

%

Adjusted Gross Margin

 

 

36

%

 

23

%

 

0

%

 

34

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q3'22

 

($ in millions)

 

Employer Solutions

 

Professional Services

 

Other

 

Total

 

Gross Profit

 

$

189

 

$

23

 

$

-

 

$

212

 

     Add: stock-based compensation

 

 

11

 

 

1

 

 

-

 

 

12

 

     Add: depreciation and amortization

 

 

14

 

 

1

 

 

-

 

 

15

 

Adjusted Gross Profit

 

$

214

 

$

25

 

$

-

 

$

239

 

Gross Margin

 

 

29

%

 

24

%

 

0

%

 

28

%

Adjusted Gross Margin

 

 

33

%

 

26

%

 

0

%

 

32

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Q4'22

 

($ in millions)

 

Employer Solutions

 

Professional Services

 

Other

 

Total

 

Gross Profit

 

$

318

 

$

24

 

$

-

 

$

342

 

     Add: stock-based compensation

 

 

10

 

 

1

 

 

-

 

 

11

 

     Add: depreciation and amortization

 

 

17

 

 

-

 

 

-

 

 

17

 

Adjusted Gross Profit

 

$

345

 

$

25

 

$

-

 

$

370

 

Gross Margin

 

 

38

%

 

25

%

 

0

%

 

36

%

Adjusted Gross Margin

 

 

41

%

 

26

%

 

0

%

 

39

%

 

 

 

6

 

 

 

FY'22

 

($ in millions)

 

Employer Solutions

 

Professional Services

 

Other

 

Total

 

Gross Profit

 

$

911

 

$

86

 

$

(1

)

$

996

 

     Add: stock-based compensation

 

 

37

 

 

3

 

 

-

 

 

40

 

     Add: depreciation and amortization

 

 

53

 

 

1

 

 

2

 

 

56

 

Adjusted Gross Profit

 

$

1,001

 

$

90

 

$

1

 

$

1,092

 

Gross Margin

 

 

34

%

 

23

%

 

-2

%

 

32

%

Adjusted Gross Margin

 

 

37

%

 

24

%

 

2

%

 

35

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Successor

 

 

 

Six Months Ended

 

 

 

December 31, 2021

 

($ in millions)

 

Employer Solutions

 

Professional Services

 

Other

 

Total

 

Gross Profit

 

$

489

 

$

44

 

$

(1

)

$

532

 

     Add: stock-based compensation

 

 

18

 

 

1

 

 

-

 

 

19

 

     Add: depreciation and amortization

 

 

20

 

 

-

 

 

1

 

 

21

 

Adjusted Gross Profit

 

$

527

 

$

45

 

$

-

 

$

572

 

Gross Margin

 

 

36

%

 

24

%

 

-5

%

 

34

%

Adjusted Gross Margin

 

 

39

%

 

24

%

 

0

%

 

37

%

 

 

 

 

 

 

 

 

 

 

 

 

Predecessor

 

 

 

Six Months Ended

 

 

 

June 30, 2021

 

($ in millions)

 

Employer Solutions

 

Professional Services

 

Other

 

Total

 

Gross Profit

 

$

392

 

$

46

 

$

(3

)

$

435

 

     Add: stock-based compensation

 

 

1

 

 

-

 

 

-

 

 

1

 

     Add: depreciation and amortization

 

 

36

 

 

1

 

 

1

 

 

38

 

Adjusted Gross Profit

 

$

429

 

$

47

 

$

(2

)

$

474

 

Gross Margin

 

 

34

%

 

25

%

 

-14

%

 

32

%

Adjusted Gross Margin

 

 

37

%

 

26

%

 

-10

%

 

35

%

 

7